SHAREHOLDERS have shrugged off a full-year loss for troubled media and advertising group APN News & Media, instead focusing on a new joint venture in its outdoor advertising business.
APN shares rose 1.8 per cent to 83.5? yesterday on details of its new 50 per cent partnership with Quadrant Private Equity.
A $159 million cash impairment charge led to a $148.8 million turnaround in performance, from a $93.8 million profit in 2010 to a loss of $45.1 million for the 2011 calendar year.
Like its fellow media players, APN has been struggling to overcome a lengthy advertising downturn in Australia and New Zealand.
Revenue from its regional papers and radio stations in New South Wales and Queensland, was hit by a combination of floods and poor consumer sentiment in tourist areas, although chief executive Brett Chenoweth said conditions in the mining towns remained stronger.
Mr Chenoweth said the company would clamp down on costs in 2012 and step up product innovation. Its "digital first" approach in larger markets such as Tweed Heads and Coffs Harbour was showing promising early results.
But the market concentrated on the release of more details on its APN Outdoor joint venture, which is expected to generate about $190 million for APN and values APN Outdoor at $272 million. It comes amid expectations of further consolidation in the outdoor advertising market.
While APN will retain some direct exposure to the industry through its Adshel street furniture business or its Buspak and Cody business in Hong Kong, it is likely to sell its 5.3 per cent stake in fellow outdoor advertiser oOh!media, which has received a takeover offer from CHAMP Private Equity.
Mr Chenoweth said the venture would focus on expanding in Asia. "We had success in 2011, we're going to have more in 2012," he said.
Morningstar Analyst Nathan Zaia said the joint venture, which includes billboards, advertisements on public transport and throughout airports, was a ray of light.
"While it may appear APN is selling one of its best businesses, given its debt position, and given that a languishing share price makes a capital raising unattractive, we don't think the company had plenty of options," he said.